Telecom regulator Rahul Khullar has said that he stands by his recommendations for reduction of the annual revenue share to 3 per cent, which the government has overruled. Speaking to The Indian Express, after the 2G auctions have brought in impressive bids of Rs 44,635 crore in two days, Khullar said that the arbitrage possibilities from keeping the spectrum usage charge different for separate bands could create “controversies again”, going ahead. “I don’t quite get the logic,” he said. While the Telecom Regulatory Authority of India (Trai) had recommended a flat charge for all spectrum usage, including those already held by telecom companies, the Cabinet has settled for a 5 per cent rate for the spectrum that the companies will buy in the current auctions. The charge will, however, remain 1 per cent for companies deploying broadband wireless access (BWA) technology on their existing spectrum and 5 per cent for those who use other technologies. The differences have kept the industry divided that was, till now, paying the charges in the range of 1 to 8 per cent, as it impacts their profitability strongly. The regulator said that the success of the current auctions will prompt the government to move towards making spectrum available almost on tap. Khullar said, this comfort is necessary to ensure telecom companies go about their job of providing more and better connectivity without bothering about the bandwidth that will be available to them. According to him, the bids by the telecom players in the current auctions show they too are aware that this is going to happen soon. Unlike the auction of FY11, when the government had presented them with a now-or-nothing offer, the telecom service providers are clear about the road map, with multiple auctions expected through FY15 and FY16. As evidence, he points to the bidding for 1800 MHz. In all the circles, he said, the estimates for reserve price set by Trai have been borne out by the nature of the bids so far. “Companies are taking a cautious approach in circles where the returns may not be strong”, he explained. Instead, one would expect tough fights for Delhi or Mumbai in the most preferred 900 MHz and so the bids here are live, he added. In FY15, the government is expected to announce the schedule for auction in the 1900-2100 MHz. This is the critical band necessary to make 3G services available on a pan-India basis. Trai is also about to release the regulations for 800 MHz band in the next few weeks. The big announcement will, however, be the auction plans for the 700 MHz. “This is the band which paired with 1800 MHz will be the ideal platform to offer 4G services”, he explained. There are now no mobiles in India that work on this band. As an example, he said, the US and even Korea run their 4G services in this band. Under Khullar, in the past eighteen months, Trai was able to reverse the steep rise in prices of airwaves recommended by his predecessor JS Sarma, which had put the companies and the regulator on to fierce dispute. More, by a series of recommendations, like clearing the scope for spectrum trading, the government and the companies were brought on the same page. Speaking at another event on Tuesday, he said that he has written to the finance ministry seeking that banks be asked to move forward on mobile banking to promote financial inclusion across the country. A system is already in place for the service and banks need to move on it, he bluntly remarked at an Assocham event on financial inclusion. “I intend, irrespective of what the central bank does, to ensure the regulation we have put in place will be enforced”. He said, Trai has already written to the finance minister explaining that the system is in place and it is now for the finance ministry to tell the bankers wake up and move.
